Why Refinance -- Do You Need to Change Your California Mortgage?

By Gil Mackey
Local Lender Columnist
Apr 10, 2008
You're wondering whether it's a good idea to refinance your mortgage, but you're not sure. You want to know why others might have done the same--what some of the reasons for a refinance are--before you change your California mortgage.

Why Refinance?

Here are some of the biggest reasons California homeowners choose to refinance their mortgages:

• Reduce payments
• Switch mortgage types
• Get cash out
• Debt consolidation

Is it a Good Idea to Refinance?

The old idea was that if mortgage rates have dropped 2% below your current rate, then it's a good idea to refinance--but that's old news. The truth is that your situation dictates whether it's a good idea. Do you need to lower your monthly payments because times have gotten tight? A refinance to an ARM or extending the mortgage term could get you the lower payments you need. Do you need cash for medical bills, college tuition, or home improvements? Many California homeowners have used a cash-out mortgage refinance to accomplish these goals.

The Smart Way to Refinance Your Mortgage

• Shop around Not all mortgage lenders can offer you the same products, the same loan types. Check with several California mortgage lenders before you decide on your refinance.
• Ask questions It is your responsibility to do the homework on whether your mortgage refinance will work for you. Your mortgage lender is more than willing to answer your questions--so ask!
• Compare apples to apples When shopping around, make sure you are comparing the same kind of mortgage refinance, as well as loan term, rate, and amount of the mortgage. Only by comparing apples to apples can you make a valid decision.

About the Author
Gil Mackey has been a writer and artist for the past twenty years. In addition to freelance writing, Gil writes for his local paper, and lives with his two children in Nevada.